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Super Vision International Inc. (SUPVA) |
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CEOCFO
Interview Index |
This is a printer friendly page! Super
Vision International has established a key patent and product position in the growing LED
and lighting industry BIO: Brett Kingstone is
the Founder and President of Super Vision International Inc. He started his first fiber
optic company as a Student at Stanford University. He has been chosen as Entrepreneur of
the Year for Orange County and the State of Florida. Super Vision has been chosen
among the Top 50 Fastest Growing Companies in the State of Florida and Top 500 Fastest
Growing Technology Companies in the United States. Last month, Super Vision received the
Greater Orlando Business Ethics Award, honoring the company and its management for
outstanding ethics in its operations. Mr. Kingstone is the author of two books, The
Student Entrepreneurs Guide (McGraw-Hill, 1981, introduction by Nobel Prize Winner
Milton Friedman) and The Dynamos (John Wiley & Sons, 1983, introduction
by Arthur Lipper III). His recent book, The Real War Against America (Introduction
by Congressman Ric Keller) should be published by year end. Mr. Kingstone holds more than
20 U.S. and international patents on fiber optic and LED lighting products and
manufacturing systems. He resides in Orlando, Florida with wife Maisa, daughter Victoria,
son Max, dog Luis and cat Kenzo. CEOCFOinterviews: Mr.
Kingstone, will you tell us about your background with Super Vision, where the company was
when you started and where you are today? Mr. Kingstone: “I started Super Vision in a small garage in Orlando Florida with another employee by the name of Roy Archer who is now our Director of Manufacturing. We started the company to build fiber optic systems for Universal Studios and Walt Disney World here in Florida. Today we have grown from two people in a garage to seventy employees in an 80 thousand square foot building in the Orlando Central Park. We have 63 distributors worldwide selling to 70 countries throughout the world. In addition to our fiber optic products, we make a full line of LED (light-emitting diode) lighting products for the signage, the lighting, swimming pool and architectural lighting industry. In addition, we have 93 lighting reps that represent our products in North America to architects, lighting designers, and electrical contractors throughout North America. We have a team of sign and swimming pool sales reps that represent our pool lighting and sign products to sign manufacturers and swimming pool manufacturers throughout North America.” CEOCFOinterviews: Will you tell us about the industry in general and Super Vision’s place in that industry? Mr. Kingstone: “We are among the top three manufacturers of LED and fiber optic lighting in the respective markets that we serve. We started out in the entertainment industry where we built custom made displays for Walt Disney, Universal Studios and Sea World. From there, we went public in March of 1994 and used the 10 million dollars of financing we raised to branch out and develop specific commodity products that we can sell on a regular basis to manufacturers of design, lighting and pool industry. That has been our key focus for the last couple of years, developing standardized products that we can sell in large quantities to manufacturers worldwide.” CEOCFOinterviews: How is that working for you? Mr. Kingstone: “We have achieved up to 12 million in sales and we are looking at the first quarter of this year as being the best first quarter that we have had in the history of the company. We have been selected among the top fifty fastest growing companies in the State of Florida, and the top 500 fastest growing technology companies in the United States.” CEOCFOinterviews: Are you doing any custom work now? Mr. Kingstone: “We will always provide the services to our clients to give them custom made fiber optic or LED products or displays when they want them because we want to be full-service oriented and to always be able to adapt to the needs of our customers. We will be focusing on standardizing product lines that can be utilized in almost any application such as our FlexLED™ system. This is made by the foot and can be installed inside a channel letter to eliminate neon. The market for neon for signage and lighting applications is several billion dollars worldwide. The big advantage of FlexLED is that it can reduce energy and maintenance cost by more than 95%, this yields a big advantage to our customers. We hope that by honing in on product opportunities like these, we can service 90% of the requests with our standard products. Still we see that custom products will be at least 10% or our business in the future. “ CEOCFOinterviews: Where is fiber optic lighting appropriate and where is LED appropriate? Mr. Kingstone: “That is a good question because people who are experts in the lighting industry are still asking that. The answer to that question continues to evolve as the improvements in LED technology continue to take place. Almost every six months we are seeing a significant increase in the light output abilities of these technologies yielding and increase in light output and a decrease in cost. With each generation of a new LED there are more applications that they become cost effective or bright enough to perform. In general, fiber optics is perfect for when you are going below the water line; it is the best choice for swimming pools since there is absolutely no electricity running through the plastic fiber optic table, only light. It is good for hard to reach areas like the top of a church atrium where you don’t want to have to run scissor lift to change a light bulb. When it comes to back-lighting channel letters for signage, we have gone from being a 100% fiber optically lit, to 100% LED lit. The reason for that is an LED is more cost effective for signage applications than fiber optics and also requires a lot less labor on installations. There are opportunities where the LED will perform better than fiber optics and there are opportunities where fiber optics are preferable for safety reasons as well as installation requirements.” CEOCFOinterviews: Will you tell us about the manufacturing of your products and inventory requirements? Mr. Kingstone: “When you speak about inventory, this is a big challenge for any manufacturer in a fast-growing technology business. I would refer to you the computer chip business of the 1980’s, where every three or four months, the computer chips in inventory became obsolete. We went from the Apple 2-E to the 286 to 386, the Pentium II to the Pentium IV, to MMX technology and now a completely new line of advanced memory chips that seems to outpace the last version in cost and memory every other month. In the LED field, we have to be cautious about our purchases and inventory to meet demand levels but at the same time avoid having an overstock of LEDs on hand which become obsolete. There has been a tremendous growth and improvement in the manufacturing process of LEDs and it is ongoing. For the next five years, one of the key areas that we need to focus on to insure profitability is proper inventory management. We need to have our sights set on the next generation of LEDs. We need to make sure that we place our orders accordingly so that we don’t wind up with LED components that have to be written off as valueless. “ CEOCFOinterviews: Please tell us about your recent distribution agreements. Mr. Kingstone: “In
the last four or five press releases that you have seen from us in the past month, have
been focusing on new international distributors. We have signed up the largest sign supply
distributor in the United Kingdom, which is Ashby. Ashby deals with 4,000 sign
manufacturers throughout the U.K. and we are happy they chose us as their exclusive
supplier for LED products in the sign industry. England is a little behind the technology
curve in the sign industry as compared to the United States. Although already successful
in the U.S., LEDs are becoming the hot new thing in the UK sign industry and we are glad
we have the number one player in that industry, actively promoting and selling Super
Vision products. The other press release that you saw was the announcement of Viking Spas
signing an OEM agreement with Super Vision. Viking is another big success that Super
Vision achieved in the pool and spa industry. Viking is one of the country’s largest
manufacturers of hot tubs and spas. CEOCFOinterviews: Do you deal with the end-user? Mr. Kingstone: “Not directly; we work through distribution, our rep network, and our domestic and international dealer network. If an end-user calls, we are most likely going to reefer them to a local rep or distributor in their community.” CEOCFOinterviews: Will you tell us about your patented products? Mr. Kingstone: “We have more than 27 existing patents in the U.S. and several times that number overseas in our international filings. We have patents on the manufacture of our fiber optic cable, patents on our end products, as well as patents on our fiber optic processes that we use in the lighting industry. Over the last several years, we have been filing patents on our LED manufacturing, products and processes. One patent we recently acquired is a fundamental patent in the industry developed by Richard Belliveau, of High End Systems of Austin Texas. High End is the number one manufacturer of entertainment lighting in the United States for theatres and nightclubs; they generate 60 million dollars a year in revenue. We had an interest in their patent and we were fortunate enough through a relationship with High End to acquire the patent on very favorable terms. This will allow us to have the fundamental foundational patent for the use of color-changing lights in the industry. We intend to continue to develop our LED product line based on this patent but we also want to make this patent available to the industry and license it. We feel there are a tremendous amount of royalties we can generate utilizing this patent. Our position would be more like what JVC did with the VHS technology when they were competing with Sony’s BetaMax, which is to offer a very low, reasonable and fair royalty rate. That way you can encourage manufacturers worldwide to be using this as a standard and we feel confident that there is going to be huge opportunities for Super Vision in that regard.” CEOCFOinterviews: What sets you apart from your competition? Mr. Kingstone: “It is our people and our products that set us apart from the competition. Products don’t invent themselves. We have a great team of people on our staff. Every single member of our company is a shareholder; they act like owners, think like owners and they support our customers as owners. It makes a tremendous difference when the customers call in and everyone who answers the phone is a shareholder in the company. It is part of our corporate culture, it is our attitude and dedication to serve people; if we have to come in on the weekends to get the job done, we will. Another factor is that many of our distributors have been with us for more than a decade. Our Japanese distributor has been with us for 12 years and our Icelandic distributor has been with us for 14 years, our Russian distributor has been with us for 10 years and so have many of our South American distributors. The reason why these relationships remain with us all these years is because the service, support, dedication and the quality that we put into our products. It isn’t any secret or magic, just hard work, dedication and most importantly, showing the customers that you care.” CEOCFOinterviews: Are
there areas in lighting that you haven’t tackled yet? CEOCFOinterviews: As CEO what is your focus on a day-to-day basis? Mr. Kingstone: “For
an example, I was out with my Brazilian distributor for lunch just before you called. This
morning I fielded calls from several of the distributors in Europe. The most important
thing I do all day is to listen to my customers and hear what they have to say. I also
listen to the end-users who call in with a problem. Sometimes we get our best new
marketing ideas by learning what our distributors are doing in one country and then
encouraging our other distributors to follow suit in their countries. On time, a European
distributor picked up a large order from a chain store that is operating worldwide and
wanted to send us photographs of their installation. The next day we e-mailed those photos
to all our distributors worldwide and encouraged them to contact the regional managers of
that chain store in their countries. Later this afternoon I will be downstairs meting with
the engineers on two or three new products that we have developed and one new patent that
we will be filing. At seven o’clock tonight I will be heading to the airport to fly
to the industry’s largest trade show which is Light Fair in Las Vegas; it starts
tomorrow morning and for the next few days we will be meeting architects, lighting
designers and customers from all over the world. We will be attending that show, and we
will have a booth there and be presenting our products. Before I turn in tonight I will
call our Asian distributors to check on their progress. CEOCFOinterviews: Outsourcing manufacturing overseas is an ongoing problem today. How do you see this affecting the US? Mr. Kingstone: “In
general terms I can see a severe problem to our country and all American manufacturers as
a whole. We are now watching American manufacturing becoming a lost art. We are losing
millions of jobs overseas; our middle class is evaporating because you don’t become a
member of the middle class by working for $5.50 an hour flipping hamburgers or taking
tickets at an amusement park. The middle class is built through manufacturing jobs and the
backbone of any economy is the manufacturing industries because they are the true creators
of wealth in the economy. We are starting to see our very economic foundation collapse in
the United States because our government has done a terrible job with international trade
policy to the enforcement of our laws such as the Intellectual Property Protection Act of
2002 and the Trade Secret Act of 1996. American industry is having their lifeblood,
their technology, stolen out from under them by Asian competitors like China and the
government is turning a blind eye. Mr. Kingstone: “To
understand the investment opportunity in Super Vision you need to have an understanding of
the industry. The LED lighting industry has grown from 140 million in sales just three
years ago, to 1.2 billion in sales. That’s a tenfold increase in a three-year period.
The industry is exploding; we are in a very historic time in the lighting industry, where
we have had the advent of the new technology that is as important as the advent of the
light bulb when it replaced the gas lamp in the early nineteen hundreds. Lighting is going
to move from a burning incandescent element to a solid state electronic source and that is
exactly what LED lighting is. LEDs will continue to go down in price and continue to prove
efficiency. With each advancement in cost and output more new applications for LED
lighting will become practical. The day will come soon when instead of screwing in a glass
light bulb at home, people will be screwing in an LED laden light bulb that will last five
or ten years and also use a fraction of the electricity. disclaimers |
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